Correlation Between Enersys and Horizon Space
Can any of the company-specific risk be diversified away by investing in both Enersys and Horizon Space at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Enersys and Horizon Space into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Enersys and Horizon Space Acquisition, you can compare the effects of market volatilities on Enersys and Horizon Space and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Enersys with a short position of Horizon Space. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enersys and Horizon Space.
Diversification Opportunities for Enersys and Horizon Space
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Enersys and Horizon is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Enersys and Horizon Space Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Horizon Space Acquisition and Enersys is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Enersys are associated (or correlated) with Horizon Space. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Horizon Space Acquisition has no effect on the direction of Enersys i.e., Enersys and Horizon Space go up and down completely randomly.
Pair Corralation between Enersys and Horizon Space
Considering the 90-day investment horizon Enersys is expected to under-perform the Horizon Space. But the stock apears to be less risky and, when comparing its historical volatility, Enersys is 13.36 times less risky than Horizon Space. The stock trades about -0.16 of its potential returns per unit of risk. The Horizon Space Acquisition is currently generating about 0.45 of returns per unit of risk over similar time horizon. If you would invest 8.60 in Horizon Space Acquisition on September 12, 2024 and sell it today you would earn a total of 3.40 from holding Horizon Space Acquisition or generate 39.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 22.73% |
| Values | Daily Returns |
Enersys vs. Horizon Space Acquisition
Performance |
| Timeline |
| Enersys |
| Horizon Space Acquisition |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
Enersys and Horizon Space Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enersys and Horizon Space
The main advantage of trading using opposite Enersys and Horizon Space positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enersys position performs unexpectedly, Horizon Space can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Horizon Space will offset losses from the drop in Horizon Space's long position.| Enersys vs. Advanced Energy Industries | Enersys vs. Hubbell | Enersys vs. Acuity Brands | Enersys vs. Kimball Electronics |
| Horizon Space vs. HUMANA INC | Horizon Space vs. Barloworld Ltd ADR | Horizon Space vs. Morningstar Unconstrained Allocation | Horizon Space vs. Thrivent High Yield |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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